New Trade Deal with Indonesia – What We Know

Posted July 15, 2025

In Donald Trump, export, exporting, exports, Global Business, import, importing, Imports, international business, International Shipping, international trade, President Trump, reciprocal tariffs, tariffs, trade deal, Trump

Deal Is Made

This morning, President Trump made a short announcement on Truth Social of a trade deal with Indonesia:

Great deal, for everybody, just made with Indonesia. I dealt directly with with their highly respected President. DETAILS TO FOLLOW!!!

Deal Inducement

President Trump sent a letter last week to Indonesia’s president, Prabowo Subianto, informing him that the U.S. would charge a 32% tariff on all goods imported from Indonesia, starting on August 1st. Any goods transshipped through Indonesia from countries the U.S. has higher tariffs on will be subject to that higher tariff.

The letter included a warning: should Indonesia increase its tariff on the U.S., for whatever reason, the number they’re raised by will be added to the 32% tariff rate the U.S. will be charging.

The letter also included direct inducement for Indonesia to make a deal:

If you wish to open your heretofore closed Trading Markets to the United States, and eliminate your Tariff, and Non Tariff, Policies, and Trade Barriers, we will, perhaps, consider an adjustment to this letter. These Tariffs may be modified, upward or downward, depending on our relationship with your Country.

Details of the Deal

Apparently, the letter was effective in getting a deal done. Speaking to reporters outside the White House, President Trump revealed some details about the deal, according to a CNBC article by Kevin Breuninger:

“We will pay no tariffs. So they are giving us access into Indonesia, which we never had,” Trump told reporters outside the White House.
“That’s probably the biggest part of the deal. And the other part is they are going to pay 19%,” he said.

President Trump returned to Truth Social today for another post about the deal, sharing this:

This morning I finalized an important Deal with the Republic of Indonesia after speaking with their Highly Respected President Prabowo Subianto. This landmark Deal opens up Indonesia’s ENTIRE MARKET to the United States for the first time in History. As part of the Agreement, Indonesia has committed to purchasing $15 Billion Dollars in U.S. Energy, $4.5 Billion Dollars in American Agricultural Products, and 50 Boeing Jets, many of them 777’s. For the first time ever, our Ranchers, Farmers, and Fishermen will have Complete and Total Access to the Indonesian Market of over 280 million people. In addition, Indonesia will pay the United States a 19% Tariff on all Goods they export to us, while U.S. Exports to Indonesia are to be Tariff and Non Tariff Barrier FREE. If there is any Transshipment from a higher Tariff Country, then that Tariff will be added on to the Tariff that Indonesia is paying. Thank you to the People of Indonesia for your friendship and commitment to balancing our Trade Deficit. We will keep DELIVERING for the American People, and the People of Indonesia!

So the three major points President Trump has shared about the deal are:

19% tariff on imports from Indonesia
No tariffs on exports to Indonesia
$19.5 Billion in purchasing commitments from Indonesia on imports from the U.S.

Trade deficits have clearly been a big focus for the president. Reducing or eliminating them is one of the major goals of his tariff strategy. Commitments to import from the U.S. has been a standard part of the deals we’ve been seeing along with reducing tariffs and non-tariff trade barriers on U.S. goods in other countries. At the same time, President Trump is determined to keep at least a baseline 10% tariff in place on goods from other countries.

What? A Budget Surplus?

President Trump’s tariffs are proving to be an extraordinary revenue source for the U.S. government. Tom Ozimek reported in the Epoch Times that tariff revenue actually created a shocking thing for the government last month – a budget surplus:

New data from the Treasury Department show that surging tariff revenues in June helped the U.S. government post an unexpected budget surplus of $27 billion, offering a rare fiscal bright spot amid persistently high federal deficits and suggesting that President Donald Trump’s tariff policies are becoming a significant source of government revenue.

With the national debt having done nothing but climb at an alarming rate for decades, a $27 billion budget surplus in a month seems incredible. It’s enough to make one think that these tariffs will continue after President Trump leaves office, even if the next president is a Democrat. Actually, there’s already precedent to think that would happen.

Even though Joe Biden – before he became president – was critical of President Trump’s first term tariffs, the Biden Administration did not remove President Trump’s tariffs. In fact, President Biden’s administration eventually even added to them.

I would not expect the next president to be as aggressive as Trump when it comes to tariffs; however, it looks likely that wherever the tariffs land when all is said and done with the Trump Administration’s trade deals and tariff adjustments, those tariffs will not be quickly done away with. It would be hard to eliminate that kind of revenue source for the country. In fact, these tariffs may be the best chance at reducing the out-of-control national debt we have.

More Deals This Month?

In the meantime, we could be seeing more deals over the next couple weeks before we reach August.

Obviously, no country in the world wants to see tariff hikes on the products it exports to the U.S. The letter President Trump sent to Indonesia’s president was one of over 20 letters sent to America’s trade partners around the world, informing them of tariff hikes that will start August 1st. Indonesia made a deal to drop the tariff on its goods from 32% to 19%. It would not be the least bit surprising for other countries to make sure they’ve made a deal before larger tariffs hit their goods.

So far, the Trump Administration has garnered four trade deals since its “Liberation Day” reciprocal tariffs announcement on April 2nd. The deals are with Vietnam, China, the UK, and now Indonesia.

The next few weeks may prove very eventful between trade deals and the possibility of retaliatory tariffs from some countries. As always, we’ll be keeping an eye on it all, here at Universal Cargo, so we can best help you navigate your importing and exporting enterprises.

export to Indonesia, import to Indonesia, Indonesia Trade Deal

Jared Vineyard

For more than ten years, Jared has researched and written about the international shipping industry for the freight forwarder Universal Cargo. His work has been republished on the web and in print, including the maritime news magazine Inside Marine. When first joining Universal Cargo, Jared trained in the freight forwarding process and helped customers with their imports and exports, giving him his initial international shipping sea legs.